This PSU stock declines despite strong quarter results, share plunges 5%

Shares of SJVN Ltd., the state-owned power generation company, dropped by over 5% in trading today following the release of its operationally weak fourth quarter (Q4FY24) earnings report.

The stock fell to a near two-week low today after closing flat at 139.65 on Wednesday. SJVN shares have surged 45% so far this year and have risen 275% over the past year.

The company reported a net profit of 61 crore for the January-March period, compared to a profit of 17 crore in the same quarter last year. This significant increase in profit is attributed to a tax credit in the current quarter.

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SJVN received a tax credit of 16 crore during the quarter, compared to a tax expense of approximately 40 crore in the same period last year.

The company’s revenue for the reporting quarter decreased by 4% to 483 crore, down from 504 crore in the same period last year.

Its operating profit, measured as EBITDA, declined 22% year-on-year to 240 crore, while the EBITDA margin contracted by nearly 1,200 basis points to 49.6% from 61.3% during the corresponding period last year.

This marks the first time in a year that SJVN’s margin has dropped below 50%.

Revenue from renewable energy sales rose to 106.8 crore in the last fiscal year, compared to 68 crore in the same quarter of the previous year.

Additionally, the company declared a dividend of 0.65 per equity share, supplementing the interim dividend of 1.15 per share announced earlier.

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SJVN has also established a Joint Venture Company with Indian Oil Corporation to develop renewable energy projects and other new technology-based initiatives. The formation of this JV is pending approval from the Ministry of Power, the NITI Aayog, and the Department of Investment and Public Asset Management (DIPAM).

Both SJVN and Indian Oil will each hold a 50% stake in the proposed Joint Venture, which will have an authorized capital of 250 crore.


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Published: 30 May 2024, 06:02 PM IST

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